How to Write a Private Vehicle Payment Agreement

by Jennifer Williams

The payment agreement portion of a private vehicle sales contract is the promissory note, or promise to repay a loan according to specific terms spelled out in the document.

Designate the buyer and seller by full name, and provide contact information for each.

Specify the seller has good title to the vehicle and the legal right to sell the vehicle.

State that the buyer is purchasing a vehicle. Identify the vehicle by make, model, year of manufacture and VIN number, and name the agreed-upon purchase price and interest rate if any.

State that the buyer promises to pay the total named purchase price to the seller, and document the number of payments the buyer promises to make, the amount of each payment, and the dates on which each payment is due.

Specify what penalty is imposed if a payment is late, and how many days late the payment must before the penalty is applied.

Address what happens in the case of default. Identify how many payments must be missed to constitute default, state what notice must be given, if any, to the buyer before the seller repossesses the vehicle.

Name any pre-payment penalties the buyer will incur if he pays off the vehicle in full before the due date of his last installment payment.

Note whether the seller will retain title to the vehicle until the note is paid in full, or whether title will be transferred to the seller with the seller retaining a security interest in the vehicle for the duration of the loan.

Execute and attach a vehicle odometer statement, which sets out the vehicle's odometer reading at the time of transfer. Federal law requires the odometer reading must be included in every vehicle transfer of ownership.

Provide signature and date of signature lines for all named buyers and sellers, and a notary public statement to be filled in by the notary public at time of execution of the promissory note.


Some states, such as Nevada, make it illegal for a private vehicle purchaser to assume payments on an existing auto loan. In these instances the outstanding loan must be paid in full and a new title issued with the seller listed as the lien holder until the private payment agreement is paid in full.


A promissory note template provided by a commercial vendor or your attorney may be helpful in constructing this portion of a private vehicle sales contract.

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